A real welfare state remains an illusion

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A few years later, I joined a nonprofit. My work took me through dusty rural roads. Here, I encountered a different India. Far from celebrating the exit of the state, this India was waiting, in fact, yearning for the state. For this, schools, roads and hospitals are waiting to be built.

This India was not naive. The people I met knew better than me that the state can be corrupt, apathetic and inefficient. But they also saw this mai-baap government (as many have described it) as a means to enjoy their economic freedom. Without the road we cannot go to the market. Without schools we cannot get jobs. It was – and arguably remains, 30 years later – constant abstinence.

It is in the midst of these two competing narratives of the Indian state – and what they mean for different Indias – that our seven-decade-long journey towards building an India that provides social and economic freedom to all citizens needs to be assessed. .

The Indian state has produced the world’s best. It created the Indian Institute of Management (IIM), the Indian Institute of Technology (IIT) and the All India Institute of Medical Sciences (AIIMS) and gifted the world some of its best doctors, nurses and engineers. We have made progress on key socio-economic indicators. The literacy rate increased from 18% in 1950 to 77% in 2017, the maternal mortality ratio decreased from 1,000 deaths per 100,000 live births in 1950 to 103 in 2017-19.

Yet, when it comes to adequately ensuring these freedoms for all Indians, our performance has been remarkably ineffective. India ranks 116 out of 174 countries in the World Bank’s Human Capital Index, 131 out of 189 countries in the United Nations Human Development Index and 101 out of 116 in the Global Hunger Index.

Our poor record on human capital and basic welfare is not only a moral failure in a democracy, but also a drag on development. This has put disproportionate constraints on large sections of India from participating in the modern economy, instead locking them in a vicious cycle of low-skill and low-wage cycles. As a result, at the age of 75, much of India still yearns for the opportunity to enjoy full and complete economic freedom.

elite slant

Behind these dismal rankings lies a story of limited political and economic imagination, some prosperity through development, broken state capacity and hard-won democratic victories that resulted in stalled and very limited welfare investment. It is the interplay of these factors that has shaped India’s wellness journey in these last 75 years.

In the pre-reformation phase, two narratives shaped the idea of ​​a welfare state.

The first was guided by the Nehruvian vision of the creation of a high-modernist state. Emphasis was placed on specific institutions to increase productivity through high-value human capital.

We built IITs, IIMs, AIIMS but also invested heavily in agriculture institutes and world class statistical institutes to name a few. But welfare in its classic sense—public education, primary health, sanitation and universal social insurance—was taken to the background.

Welfare, the second narrative went, was not affordable and India had to focus on economic growth which would eventually bog down.

It is not that the state did not recognize the centrality of welfare investment to human capital. The Bhore Committee report in 1946 recommended the creation of primary health infrastructure for India. In 1966, the government established the Kothari Commission in 1966 and unveiled a National Policy on Education in 1968, which emphasized universalization of education.

Nevertheless, the dominant policy framework remained focused on centralized economic planning and the creation of specialized institutions. The five-year plans of these early decades paid only lip service to welfare. Even in the Indira Gandhi era of Garib Hatao, investment in building a grassroots welfare state was limited to alleviating absolute poverty rather than building human capital.

But democracy is a powerful corrective. Since the 1980s, civil society and the courts together did what the Constituent Assembly hesitated to do. He pushed for a more detailed interpretation of Article 21, which guarantees the right to life, and pushed for the state to formally recognize certain social and economic rights – a matter which the Constitution defined as the Directive Principles. was kept in These new places of pressure gradually pushed the Indian state towards a re-imagining of welfare. State governments also started to innovate – the mid-day meal scheme is the most important of such steps in Tamil Nadu.

state of retreat

The year 1991 marked the beginning of a dramatic change that created opportunities and put constraints on our welfare fantasies. Against the backdrop of a stifling license raj system, getting the state out of the way was the living spirit of the 1991 moment. Regulation, market competition, exit from the state were the mantras of the time. But our policy and economic imagination failed to invest in the state where we needed it. Worse, we allowed most of the institution-building project of the early years to atrophy.

This was visible in the collapse of higher education institutions, our refusal to invest in improving our statistical system and, above all, public administration, which was steeped in corruption and inefficiency.

In the post-liberalisation phase, the size of the state actually shrank. Political scientist Devesh Kapoor’s calculations show that public employment in India has fallen from 19,000 per million population in 1986 to 14,000 per million population in 2012.

Economic development opened up new avenues of political rivalry. The elite policy and economic imagination that sought to get the state out of the way ranked welfare and development as tradeoffs. But as India began to shine, India pushed back – and this was a reality that politics simply could not ignore. The result was a half-hearted expansion in the architecture of India’s welfare.

Between 1990–1991 and 2013–2014, social sector spending per capita registered a three-fold increase – spending on education increased by 2.7 times and that on health by 2.3 times. This was not liberal, evident when you compare India’s spending on health and education with countries with equivalent and lower levels of GDP. But this led to limited expansion in the infrastructure of key public goods such as health and education.

India today boasts of almost universal enrollment in primary education and a large network of primary health centres, nutrition centers and subsidized toilets across the country. But the real power of the moment came in the form of new laws ensuring the right to work and the right to food. The laws offered a new imagination to transform the terms of the social contract into a contract based on rights and active citizenship, away from the vagaries of the maternal government.

This benefit was made against the backdrop of a specific policy discourse, which saw spending – particularly on MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) and the Public Distribution System (PDS) – as an exercise in fiscal negligence. It’s a victory in itself. Democracy.

Today these programs saved the country from starvation amidst the horrors of Kovid. But COVID also highlighted how limited even these benefits are.

Most of India’s workers have no safety net and are only an income shock away from abject poverty. These workers, who were left to walk home amid the havoc of the first lockdown, are a reminder of how easily the Indian state takes away the basic rights and dignity of its citizens and India will continue to seek equal citizenship in 2022. How far is the constitutional promise from being achieved. ,

Moreover, in the competition between state exits and welfare investments, despite these limited advantages, no effort was made to build state capacity where we needed it. Every rupee spent on welfare has been challenged as a “freebie” or populist negligence. Instead, corruption and inefficiency were routinely offered as an excuse to withdraw investments. While democratic pressures protected safety nets like MGNREGA and PDS, investment in basic welfare – health and education fell victim to the state’s low potential

Consequently, India’s performance on public provision, on key metrics of quality and outcomes, has been disappointing. The Annual Survey of Rural Education for more than a decade has highlighted that nearly 50% of students in India can barely read a Class II text when they complete 5 years of primary school.

Primary health also suffers from serious quality concerns. Studies show that government doctors put in 50% less effort and are less likely to correctly diagnose patients than doctors in other developing countries.

private choice

In this mix of low investment in state capacity and poor outcomes, we have fallen into a vicious cycle of exiting core government services. Anyone who has the means, whether rich or poor or middle class, has turned to the private sector.

For example, pre-Covid, almost 50% of India’s primary school going children were in private schools. Not only does it emphasize meager incomes for dubious quality education, but it has also led to distorted democratic outcomes.

Today most Indians – and this includes those who are part of the state apparatus, bureaucrats and politicians – do not rely on the public system to deliver public and worthy goods (especially health and education).

This collective disillusionment has created a vicious cycle of weak distribution, mass exits, broken legitimacy, and thus under-investment in public systems, which, in turn, again leads to weak distribution.

Democracy’s response to this disillusionment is to invest in state capacity rather than technology-enabled direct benefit transfers (and sometimes flirt with ideas such as universal basic income) and state-led privatization of public goods (PPP in health is a good one). example) is to be used. To distribute important original public and worthy goods that are at the center of welfare.

When we look back 75 years, India has the worst record on human development and welfare. Democracy pushed the state toward limited benefits, but our collective elite’s fascination with getting the state out of the way, and refusal to accept that welfare constitutes development, fueled pessimism about the state’s potential. Original public goods are allowed to take root.

In 2022, schools, roads and hospitals will be in the parts of rural India that were searching for them in the early 2000s. But for most of India, the promise of a genuine welfare state supplying quality goods remains an illusion. To ensure this we need to believe in the state and invest in its capabilities to provide economic freedom to all. This is the challenge of the next 25 years.

The author is the President and CEO, Center for Policy Research, Delhi

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